As warned in the previous post price may continue in a complex correction before resuming its impulsive behaviour. At this point we still have multiple scenarios in the short term both bullish and bearish.
Bearish scenario:
1- We may be near the end of a double zigzag correction as shown here. What would be expected in this case is for price to reverse sharply between 2847 and 2873 (this is the 100-123% extension for the double zigzag as shown). For this scenario to be valid price must not exceed 2895 level. For the time being price has validated the blue pitchfork and a short trade should not be taken before this pitchfork is broken
Bullish scenario:
2- There is the possibility of developing a triangle before resumption of the uptrend. This would allow for the 2895 level to be exceeded as part of the triangle.
3- The possibility of developing a flat correction before resumption of the uptrend. This too would allow for the 2895 level to be exceeded.
4- Complex double and triple threes are also possible at this juncture.
The safest way to trade given the multiple possible EW scenarios, is to rely on the pitchforks. For example price is currently following this blue pitchfork nicely. It would be interesting to see if price bounces off its median line or zooms through it to higher levels. A long trade is possible with a stop loss below the 0.25 quartile where price has found support, and a short trade is also possible once price breaks the lower parallel if it does break it.
Bearish scenario:
1- We may be near the end of a double zigzag correction as shown here. What would be expected in this case is for price to reverse sharply between 2847 and 2873 (this is the 100-123% extension for the double zigzag as shown). For this scenario to be valid price must not exceed 2895 level. For the time being price has validated the blue pitchfork and a short trade should not be taken before this pitchfork is broken
Bullish scenario:
2- There is the possibility of developing a triangle before resumption of the uptrend. This would allow for the 2895 level to be exceeded as part of the triangle.
3- The possibility of developing a flat correction before resumption of the uptrend. This too would allow for the 2895 level to be exceeded.
4- Complex double and triple threes are also possible at this juncture.
The safest way to trade given the multiple possible EW scenarios, is to rely on the pitchforks. For example price is currently following this blue pitchfork nicely. It would be interesting to see if price bounces off its median line or zooms through it to higher levels. A long trade is possible with a stop loss below the 0.25 quartile where price has found support, and a short trade is also possible once price breaks the lower parallel if it does break it.